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A sole trader who genuinely employs his wife in a management/administrative role is attracted to the idea of limited liability through incorporation. Apart from trade debtors and creditors a fluctuating bank balance and some computer and other office equipment the only asset is goodwill. The value of the goodwill relates to the reputation of the business and its ongoing client base. Annual profits after paying his wife a nominal salary are in the region of £50 000 and growing.

The intention is to form a limited company with husband and wife each subscribing for 50 £1 shares. The existing business will then be transferred into the limited company. Thereafter both husband and wife will be paid a salary to the extent that pension contributions require with further remuneration being drawn in the form of dividends.

It would appear that there would be a 'market...